U.S. Authorities Seize Domains Used in ‘Pig butchering’ Cryptocurrency Scams

The U.S. Justice Department (DoJ) on Monday announced^[1]
the takedown of seven domain names in connection to a “pig
butchering” cryptocurrency scam. The fraudulent scheme, which
operated from May to August 2022, netted the actors over $10
million from five victims, the DoJ said.

Pig butchering, also called Sha Zhu Pan, is a type of scam in
which swindlers lure unsuspecting investors into sending their
crypto assets. The criminals encounter potential victims on dating
apps, social media sites, and SMS messages.

These individuals initiate fake relationships in an attempt to
build trust, only to trick them into making a cryptocurrency
investment on a bogus platform.

“Once the money is sent to the fake investment app, the scammer
vanishes, taking all the money with them, often resulting in
significant losses for the victim,” the DoJ said.

The seven seized portals all mimicked the Singapore
International Monetary Exchange (SIMEX), the agency pointed
out.

But once the funds were transferred into wallet addresses
supposedly provided by these domains, the digital currencies are
said to have been immediately moved through an array of private
wallets and swapping services to conceal the trail.

“Pig Butchering fraud highlights the lengths actors will go to
socially engineer a target into falling victim to crime perpetuated
by large cybercrime ecosystems,” Sherrod DeGrippo, vice president
of threat research and detection at Proofpoint, previously told The
Hacker News.

“The emotional manipulation, friendly tone, and sheer duration
of the pre-exploitation phase allows genuine feelings to develop,
and the actor exploits that emotion for financial gain, to the loss
of sometimes millions of dollars^[2].”

An advisory released by the U.S. Federal Bureau of Investigation
(FBI) last month noted^[3] how when the victims
attempted to withdraw their investments, they were asked to pay
extra taxes or penalties, leading to more loss.

The intelligence agency, in April, revealed^[4]
it received more than 4,300 complaints related to crypto-romance
scams, resulting in more than $429 million in losses.

A recent report from Proofpoint also detailed some of the other
tactics adopted by the fraudsters, including suggesting shifting
the conversation to Telegram or WhatsApp for a “more private chat”
and encouraging the victims to send compromising photos.

“In addition to cryptocurrency-based lures, these criminal
enterprises have used gold, forex, stocks, and other subjects to
exploit their victims,” researchers Tim Kromphardt and Genina Po
said.

“Such schemes are successful due to the intimate nature of the
conversations leading up to the ‘slaughter.’ Causing shame and
embarrassment are key goals for threat actors that leverage this
type of social engineering to exploit victims, similar to romance
fraud.”